December 31, 2007

 

CBOT Soy Outlook on Monday: Down 15-17 cents on follow-through selling

 

 

Chicago Board of Trade soybean futures are predicted to start trading 15-17 cents lower Monday, following the late weakness in Friday's trade and spillover from the sharp losses set in overnight activity, analysts said.

 

The CBOT will close at 1:00 p.m. EST Monday and will be closed Tuesday for the New Year holiday.

 

In overnight e-CBOT trading, January dropped 16 3/4 cents to US$11.91 per bushel and March also fell 16 3/4 cents to US$12.06 1/4. E-CBOT volume in March was 20,032 contracts.

 

Soybeans will open lower on spillover from the sharp losses set in overnight activity and the late weakness in Friday's trade, an analyst said.

 

Rainfall over the weekend in Brazil pressed prices overnight and should also contribute to a lower opening, a commission house analyst said. In addition, deliveries were much larger than expected in the soy products, the commission house analyst added.

 

Scattered showers and thunderstorms with amounts of 1.00-to-2.50 inches occurred in Rio Grade do Sol in Brazil over the weekend and light to moderate rain is forecast through Wednesday, DTN Meteorlogix Weather said. In Argentina, there were scattered showers through eastern Buenos Aires over the weekend with mostly dry weather elsewhere. Isolated-to-widely scattered showers are forecast Tuesday extending into Wednesday in parts of the growing region, Meteorlogix Weather said.

 

Deliveries posted against the January soybean contract were 302 contracts, in line with analyst expectations. However, deliveries posted against January soybean oil were 9,908 contracts with deliveries posted against January soybean meal totaling 1,677 lots.

 

Large commercial traders reduced their long Chicago Board of Trade futures and options on futures positions by 10,175 contracts and cut 6,615 contracts from their short holdings and are now net short 278,503 contracts as of Dec. 24, the Commodity Futures Trading Commission reported Friday in the supplemental commitment of traders report. Large speculative traders increased their long positions by 2,431 contracts and added 1,552 contracts to their short positions and are now net long 126,643 contracts the CFTC said. Index funds added 1,131 contracts to their long positions and trimmed 185 contracts from their short positions and are net long 184,952 contracts, the CFTC said.

 

On daily technical charts, March soybeans closed lower Friday and traded a bearish reversal day on the daily bar chart, a technical analyst said. The contract reached a fresh contract as well as a new 34-year high but was unable to maintain those gains. The dominant uptrend, however, remains in place, although there are some technical signals emerging that could indicate a correction or consolidation, the analyst said. Support is seen at the US$12.09 to US$12.00 level with first resistance seen at US$12.48 to US$12.50.

 

In overseas markets, crude palm oil futures settled sharply lower on aggressive year-end selling and profit taking, market participants said. The benchmark March contract on the Bursa Malaysia Derivative Exchange ended down MYR75 at MYR3,047/tonne.

 

In other soybean news, China announced a plan to tax grain exports for corn, wheat, rice and soybeans in 2008 in an attempt to slow a surge in food prices, the Ministry of Finance said Sunday.

 

Futures trading on China's Dalian Commodities Exchange was closed Monday and will reopen Wednesday after the New Year holiday.